It has in effect created a precedent by which sporting authorities can be held responsible for injuries suffered by participants under their jurisdiction. Five British riders have died in equestrian events this year, tragedies that must raise questions over where responsibility for safety lies in that sport too.
In boxing alone, others who were injured shortly before Watson - principally, Mark Goult, a Norfolk bantamweight, who remains disabled - may also have cases for compensation.
The ruling will lead to attempts to improve legal regulations governing all sports because authorities will fear being found liable in the event of an accident. The traditional view that sportsmen and women take part at their own risk has been overturned.
The perilous position of the British Boxing Board of Control was acknowledged in its statement, which concluded: "This is a very serious matter for the future of professional boxing in Britain and we must discuss the whole position not only with our legal advisers but with our members."
The board's lawyers have already made clear that an award of anything approaching the pounds 1m that Mr Watson wants would be far beyond its means. It had been thought that in the event of the board losing the case, time might be bought through the appeals procedure, enabling the current body, which has existed since 1929, to be disbanded and plans for a replacement be put into place.While the board was refused leave to appeal immediately after the judgment, it still remains hopeful of doing so.
About 620 professional boxers are working under British licences each year, and more than 200 promotions are regulated by the board - one-third of them televised. In the coming weeks, the sport's controllers face the task of working out a way in which it can continue to operate.
Mr Watson's case rested on events immediately after his collapse in the ring at the end of a fight with Chris Eubank at White Hart Lane stadium on 21 September 1991. Mr Watson's lawyers argued successfully that had attention in the ring and his removal to hospital been as swift as it might have been, his disability might have been minimal.
Although he emerged from a coma after 40 days and made a determined attempt to make some kind of recovery, he remains paralysed down his left side and has lost half of his brain function.
His surgeon, Peter Hamlyn, has always said time was vital in the treatment of head injury victims. It was no secret that precious time was lost in the treatment of Michael Watson.
The ringside area was overcrowded after some spectators had breached security restrictions, hindering the attempt to get full medical help to the boxer. Once he was treated, it also took time to clear the way for his stretcher to be taken to the ambulance. He was then taken to the North Middlesex Hospital, which did not have a neurological unit, before being taken to St Bartholomew's.
After the tragedy, the board met Dr Hamlyn, and worked hard to eradicate the kind of difficulties encountered on that night.
"It was no one's fault," said the board's secretary, John Morris, shortly after the tragedy. "The ambulance driver did what he would have done normally. He took Michael to the nearest hospital casualty department."
The board has always insisted that they tried their best for Mr Watson within the rules in place at the time and given the knowledge available to them. However, this decision says it did not; in effect, it says that all sporting authorities have a legal responsibility to provide the fullest possible medical facilities for their participants. And if they do not, they can be run out of business.
n Bob Mee is a boxing writer who attended the Watson versus Eubank fight.Reuse content